I'm not a big fan of James Galbraith. The Texas-based academic PhD in economics is the son of none-other than America's major water-carrier for John Keynes, the late John K. Galbraith.
However, these two video clips are worthy of your viewing time.
http://finance.yahoo.com/tech-ticker/article/216311/Part-I-Geithner
http://finance.yahoo.com/tech-ticker/article/216480/Part-II-Geithner
I agree with pretty much everything Galbraith says. The banks won't lend more because of this program. They simply want to avoid insolvency. Yes, they may even bid on each other's assets, in order to prop up prices.
Remember when Drexel's high yield debt maven Michael Milken did this with his clients? Each beneficiary of Milken's funding skills was required to buy some of the same paper from another of his clients, thus providing a floor for valuation.
In any case, I think these two videos lay bare some- but only some- of the problems with Geithner's program, which will ultimately lead to its failure to reach its objectives of healing the US economy's financial sector.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment